Are Thriving Housing Markets Moving East?

Most housing reports find that the markets with the most activity are located in the West. While Pro Teck Valuation Services’ latest Home Value Forecast did find that nine of the top 10 markets were located either on the West Coast or in Western States, there was one surprise from the East on the list—Durham-Chapel Hill, North Carolina.

According to Pro Teck, the “Research Triangle” area of North Carolina boasts several attributes that create a thriving housing market, such as a nearby university (University of North Carolina), and many high tech, medical, and banking industry companies who have moved into the area and employ UNC grads.

“There’s a reason why the Research Triangle is known as the land of tees, trees and PhDs,” said Tom O’Grady, CEO of Pro Teck Valuation Services. “In years past, one would have to move to the Northeast to find high tech careers. Today, companies have moved to where employees can enjoy all that comes with living in the North Carolina countryside.”

Fundamendals have drivin the housing market in Durham-Chapel Hill, which has not experienced the same extreme price swings as other markets. Home price versus employment for Durham-Chapel Hill generally correlate with each other, as do household income and home price per square foot, according to Pro Teck.

“Looking at the data, one can see the Durham-Chapel Hill CBSA (core-based statistical area) is a healthy market driven by classic supply and demand fundamentals,” said O’Grady. “In contrast, one can look at the ‘bubble’ in home prices in Miami from 2003-2007 that didn’t have a corresponding increase in employment—that’s when the trouble starts.”

Two of the top 10 housing markets are located in Washington (Mount Vernon-Anacortes and Olympia-Tumwater), one is in Colorado (Colorado Springs), one is in Oregon (Eugene) and five are in California (Yuba City, Vallejo-Fairfield, Modesto, Stockton-Lodi, and Fresno). Yuba City, which is located 40 miles north of Sacramento, has seen its percentage of REO sales drop from over 60 percent at its peak in 2008 when the crisis hit down to near-historic norms of 4.43 percent. According to Pro Teck, the limited housing supply (2.5 monts of remaining inventory) will likely mean continued home price appreciation for that area.

Click here to view the complete Pro Teck forecast.